Export data adds to mixed outlook for German economy

German exports were flat in April and imports fell, adding to the patchy picture that has emerged of Europe's biggest economy at the start of the second quarter. 

Monthly exports were unchanged in April after posting a solid 1.9-per-cent gain in March and a 1.4-per-cent rise in February, the Federal Statistical Office (Destatis) said Thursday, as demand declined from China and the world's leading emerging economies.

The data also raised fresh worries about the outlook for German domestic demand, with imports posting their second consecutive monthly fall in April.

Imports slipped by a surprise 0.2 per cent in April after contracting by 2.3 per cent in March, Destatis said. Imports were unchanged in February.

Analysts had predicted a 0.8-per-cent drop in monthly exports in April and 1.3-per-cent rise in imports.  

Exports, however, were 3.8-per-cent higher in April compared with the same month last year, while yearly imports were unchanged, Destatis said.

Many economists expect the German economy to slow in the months ahead after expanding by 0.7 per cent in the first quarter compared with the final quarter of 2015, when it grew by 0.3 per cent.

"While we remain optimistic with regards to the labour market, we think that the impetus from low oil prices to real incomes is fading," Germany's biggest bank, Deutsche Bank, wrote in a note to clients this month. Deutsche cut its second quarter projections from 0.3 per cent to 0.1 per cent.

The slide in imports and the unchanged figure for exports resulted in Germany recording a record trade surplus of 24 billion euros (27.3 billion dollars) in April. This is the highest amount since records began in 1990 following German unification.

The release of the latest trade data followed the publication of a slew of key German data, which have sent out often conflicting signals about the current state of the nation's economy.

While German factory orders fell sharply in April on the back of a slump in foreign demand, industrial production rebounded as the output of investment equipment reported a strong gain. 

German business confidence climbed more than expected in May and a survey of consumer confidence edged higher.

The unemployment rate also recorded a bigger-than-forecast drop in May with the jobless rate falling to a more-than 25-year low of 6.1 per cent.

But monthly retail sales declined unexpectedly in April, falling by 0.9 per cent from March to record their second consecutive decline.

"After a strong growth performance in the first quarter on the back of strong consumption and construction, all hard data for April was weaker than in the first quarter, and gross domestic product growth looks set for a slowdown," said ING Bank economist Carsten Brzeski.

The German central bank, the Bundesbank, last week lowered its growth outlook for Germany to 1.7 per cent this year compared with its December forecast of 1.8 per cent.

Growth in Germany should then drop back to 1.4 per cent in 2017 down from its previous forecast of 1.7 per cent, the Bundesbank said.

Last update: Thu, 09/06/2016 - 12:19
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